Market Closes - June 5, 2013

Financial markets were the feature of the day as U.S. equity markets suffered sharp losses amid market weakness in Europe and rising fears that the U.S. Federal Reserve may begin tapering its bond-buying program sooner than expected. Money flowed into US Treasuries, which drove yields down markedly.

Old-crop corn and soybean futures were supported on supply concerns, while new-crop futures traded lower on ideas 2013 crops will be abundant. Wheat futures were pressured by oncoming seasonal harvest pressure and weakness in corn futures.

While July corn and bean futures have strengthened, cash basis values have weakened. At HENDERSON, cash corn at +60 is down 8 cents from a week ago, and soybean basis at +50 is down a dime from a week earlier (3 weeks ago, cash bean basis was +107).

Cattle futures closed lower as Choice boxed beef continues to weaken (now about $7 below the record peak). Choice carcasses down 0.89 at 204.40; Select carcasses up 0.47 at 184.56. June Live Cattle futures are discounted to last week’s cash trade around $124/cwt. Rising beef supplies in June could weigh on this market.

Lean Hog futures erased the morning losses to close little changed from Tuesday’s close. The strength may be tied to the midday strength in pork values (up 2 cents); however, the end-of-day FOB Plant report put the carcass value at $95.22, down 54 cents. So LH futures may come under pressure when trading resumes this evening.